Modern agriculture has roots in
the 1860s. Prior to 1860, farming was the predominant way of life in America.
Farm families made up close to 50% of the U.S. population and farmers were
nearly 60% of the workforce.When Abraham
Lincoln established the U.S. Department of Agriculture in 1862, he called it
the “people's department.” Like Thomas Jefferson before him, he was reaffirming
the “yeoman farmer” and the foundation of American society.

The Homestead Act of 1862 opened new
land on the western frontier for farming, land previously occupied by Native
Americans. Homesteads were initially limited to 160 acres, which was considered
enough to sustain a family. In the early 1900s, homesteads were expanded to 320
acres for dry land farming and to 640 acres and livestock production. The
intent was not to expand agricultural production but instead to expand control
over the continent through occupation. However, much of the homesteaded land
eventually fell into the hands of large landowners and land speculators. With
completion of the transcontinental railroad in 1869, the West was open for
business, including agribusiness.

Wheat flour from the Great Plains,
beef from the Southwest, pork from the Corn Belt, and Oranges from California
all began to flow to the East. Farming and ranching operations in the West grew
far larger than was needed to support a family. Farming was still a way of life
for many but it was becoming a business for many others. Between 1870 and1890, numbers
of farms in the U.S. grew by 80% to 4.5 million. Even with the rapidly growing
national population, farming still employed 41% of the U.S. labor force.
Production of all major agricultural commodities – wheat, corn, cattle, hogs… –
expanded correspondingly, which ultimately triggered the agricultural
depression of 1893-94. Widespread farm bankruptcies halted expansion of farm
numbers. Many farmers felt the sharp lashes of economic discipline that reach
out as farming becomes a business rather than a way of life.

The economic high-water mark for American
agriculture came in the decade of 1909 and 1918, buoyed by a booming U.S.
economy during the buildup to World War I. Prices of agricultural commodities
rose to levels that have not since been equaled in terms of buying power for farmers.
Total farm numbers had leveled out during the 1890s as early mechanization, the
forerunner of industrialization, had allowed each farmer to farm more land.
Larger farms added to farm prosperity during this Golden Era in American
agriculture.

Higher prices and continued mechanization
again led to surplus production. Chronic overproduction coupled with the
post-war economic recession of 1920-21 heralded the beginning of two decades of
depressed commodity prices and farm incomes. The Dustbowl of the Great Plains
and the consequent western agricultural migration are parts of the sad legacy
of this era. The average farm size in 1920 was still only 140 acres with
farmers making up 27% of the labor force. Total number of farms in the U.S.
peaked at nearly 6.5 million during in the 1920s and remained stable during the
Great Depression of the 1930s. It took the wartime economy of the 1940s to
return the American farmer to a position of economic respectability. However,
farming has never returned to its prior status as a desirable way of life.
Agriculture emerged from World War II as a business, on its way to becoming an
industry.

Many people associate
industrialization with the transition from an agrarian to manufacturing
economy. However, industrialization is more accurately defined as a mental
model or paradigm for organizing and managing resources – land, labor, and
capital. The basic motivation for industrialization is economic efficiency. The
basic strategies are specialization, standardization, and consolidation of control.
Specialization facilitates division of labor – each person doing fewer things
better. Specialized functions then must be standardized so that each
contributes its part to a coherent whole. The standardized functions can then
be simplified and routinized, allowing control to be consolidated into larger,
more efficient production units. In a competitive market economy, profits
provide the motivation for the relentless pursuit of ever greater economic efficiency.
Industrialization allowed farmers to specialize in food production, freeing others
to specialize in manufacturing the other things associated with a modern,
industrial society.

Chemical technologies developed
during World War II facilitated the industrialization of agriculture. Cheap
nitrogen fertilizers and pesticides encouraged farmers to abandon crop
rotations and diversified crop and livestock farming as means of managing pests
and maintaining soil fertility. The Land Grant University system, created by various
Acts of Congress between 1862 and 1914, shifted from its pre-war focus on
empowering farm families with education and information to developing and
transferring industrial technologies. The USDA shifted from its public service
mission of providing food security through viable family farms to economic
security through productivity and efficiency. Farms powered by horses and solar
energy gave way to farms powered by tractors and fossil energy. Farms were being
transformed into factories without roofs and fields and feedlots into
biological assembly lines.

Capital and technology replaced
labor and management as farms were consolidated into larger and fewer farm
businesses. By 1970s, farm numbers had dropped by more than one-half from their
peak, leaving only 2.8 million farms. The surviving farms averaged 390 acres,
nearly three times as large as in the 1920s and employed less than 5% of the
workforce, compared to more than 25% in the 1920s. Agriculture was ripe for the
economic euphoria that arose from expanding global markets during the 1970s. At
the advice of Secretary of Agriculture Earl Butz, farmers planted
fencerow-to-fencerow and tore out the fencerows, windbreaks, and anything else
that stood in the way of industrial farming.

The agricultural experts failed to anticipate
the global economic recession of the 1980s, which dried up export markets and caused
commodity prices to plunge. Farmers were caught with large debts at record high
interest rates with prices too low to cover their financial commitments. American
agriculture was confronted with the “farm financial crisis of the 1980s,” as it
is stilled called among those who remember the agony of rural America at that
time. Roughly one-fourth of the remaining farms went out of business during
that decade. Farm numbers fell to around 2 million and have since remained at
that general level. However, the agricultural transformation of the 1980s was
far more profound than indicated by the drop in farm numbers. The survivors
were mostly smaller family farms on which farming had remained a way of life
and the large specialized farm businesses that had prospered during the 1970s.
Those who suffered most were on mid-sized, full-time family farms who had
decided too late to expand into larger, specialized bottom-line farm
businesses.

There will never be another farm
financial crisis like the 1980s. The large, specialized operations have
continued to grow larger, but most important, are increasingly controlled by
large, multi-national agribusiness corporations. Corporate contracts promise
economic security by protecting farmers from the vagaries of open markets. The
corporations typically don't own farms or feedlots, but they can control the production
process through comprehensive contracts. Contractual arrangements range from specifying
a selling price or use of a specific herbicide to controlling virtually every
aspect of the production and marketing process. The percentage of agricultural
commodities produced under comprehensive contracts was estimated by USDA at 41%
in 2005, up from 31% in 1993.An earlier
estimate placed production under all types of contracts at 63% in 1997.
Considering the prevalence of contract livestock and poultry production and genetically
modified corn and soybeans covered by licensing agreements, the percentage of
production under some form of corporate contract is likely more than 80% today.

The objective of contract production
is coordinated control of the food system. When few enough corporations control
enough production to stabilize production on the backs of their contract
growers, they can ensure consistent profits for their stockholders. As of 2007,
four corporations controlled 84% of the beef packer market; four corporations
controlled 66% of the pork packer market; four corporations controlled 59% of
the broiler market. The turkey, flour milling, seed, and other agricultural
markets were similarly concentrated. Once these firms have a large percentage
of their raw material needs under contract, they are in a position to
manipulate the remaining open markets to their advantage. They essentially have
control of the agricultural economy. Once-independent farmers become nothing
more than contract workers for the corporate food industry.

Corporatization of the food system is no longer
being driven by profits gained through greater economic efficiency. The
economic efficiencies of large scale farming operations were probably exhausted
by the 1950s and even earlier in most non-farm sectors of the food economy. The
motives of further corporate consolidation are market power and political
power. Market power can be used to extract profits by exploiting both consumers
and producers. Consumers' food choices can be limited to maximize sales of the most
profitable products. Contract growers can be pressured to minimize production costs
through production practices that degrade the land and natural environment and
diminish the quality of life in rural communities.

Corporations are not real people;
they have no ethical or social values. The only common value shared by stockholders
in large publicly traded corporations is the desire to enhance the value of
their investments. The corporatization of American agriculture has left us with
a food system that no longer functions to provide safe, wholesome, nutritious
food for people. It functions to maximize the short run economic benefits of
corporate managers and global shareholders. The most costly consequence may be
declining physical health and rising costs of health care, both of which
undermine the future of our nation.